Thirty years ago, succession in business was almost always thought of in male terms: crown prince, heir apparent, following in his dad’s footsteps. Yet, today, succession increasingly involves women, the result of their growing emergence as entrepreneurs, senior business executives and CEOs.

The implications for financial services professionals are significant. To best serve women business owners and their companies, financial services professionals must understand that succession planning with women is different.

A woman business owner has unique needs and perspectives that tend to make succession planning a longer process involving both personal and business issues, including the welfare of her executives and employees who will remain with the company after her departure.

To better understand the dynamics at work, here are three areas in particular that deserve your attention.

Bridging the gender gap

Women CEOs prepare better for succession than men. According to the MassMutual Financial Group/Raymond Institute American Family Business Survey, 49% of companies led by women have selected a successor already, compared to 40% of companies led by men.

Not only are women CEOs more predisposed to discussing succession issues, they also demonstrate keen sensitivity to gender issues. For example, woman-owned family firms are more likely to choose a woman successor as CEO. And they are more likely to have greater gender balance in the composition of their boards of directors, according to the survey.

As a result, financial services professionals who seek to serve this market need to understand and display appropriate sensitivity to gender issues that apply to the selection of successors and the makeup of boards.

Unique issues, unique needs

Notwithstanding their predisposition to succession planning, women investors, particularly professional women, face unique financial planning issues and offer unique perspectives. First, as a group they tend to be underinsured and ill-prepared, generally carrying less life insurance than men.

Why? Women executives often spend much time and effort caring for the financial needs of their families and loved ones, sometimes to the detriment of their own personal finances. Second, many women investors believe that their financial advisors do not listen to them. However, high-net-worth women often cite financial professionals as their most important source of investing advice.

As a result, the relationship between advisor and female investor can be tenuous or–when solidified through superior attention and service–valuable to the client.

These factors are particularly important for a financial services professional attempting to help a female CEO with personal financial issues in preparation for a succession. It is necessary to spend time understanding your client’s needs by exploring not only the hard financial numbers but also the feelings that accompany them.

Additionally, it is important to recognize that a female CEO, despite her success in business, might not be as financially prepared as one might assume she would be for her transition. It behooves the financial services professional to explore critical issues such as:

o living comfortably in retirement;

o protecting and growing assets;

o benefiting causes important to her;

o funding education;

o having adequate resources for long term care; and

o staying financially secure after the death or disability of a loved one.

Benefiting the organization

A successful succession is part business planning and part people planning. Ensuring an orderly transition that protects the company and its shareholders is paramount. That’s especially true for women business owners who care so much about their employees–the people who have helped them become successful.

One key to achieving a smooth transition is the retention of key senior executives and personnel who, at a time of uncertainty and possible turbulence, might be inclined to depart. Clearly, communication and preparation play a large part in gaining the confidence of personnel and convincing them to stay on board through a transition.

However, retention also might be influenced positively by the strength of executive and employee benefits provided by the company.

From the financial services professional’s perspective, executive and employee benefits are a fertile area to explore when helping female CEOs and senior executives prepare for a succession. Keep in mind, women business owners tend to use the same products and services at home as they do in their businesses.

When a woman executive trusts and values her financial services professional, she is open to exploring both business and personal solutions and services. If you can build a meaningful relationship with a woman business owner, and help her resolve her financial concerns surrounding succession, then you will likely also have the opportunity to assist her in her personal financial planning.

Succession planning is a process that doesn’t end with the execution of a buy-sell agreement. Business owners need to deal with a host of important issues, such as finding a suitable successor and having a back-up plan in place in case the original successor withdraws. Owners also must ensure the potential successor will continue or improve the company’s positive culture, accurately value the company and ensure the chosen successor can afford the purchase.

The process can be complicated, and financial services professionals can be one of the best resources to help the female CEO by recognizing that she will approach succession planning with concerns and needs that are unique to women business executives.

As female executives and CEOs in family-owned and small businesses become increasingly frequent players on the corporate stage, they are challenging us to do a better job with succession planning. As we do, perhaps soon we will greet news of a newly minted CEO by noting–without second thought–that she followed in her mom’s footsteps.

Susan Sweetser is second vice president, women’s markets, for Massachusetts Mutual Life Insurance Company, Springfield, Mass. She can be reached at ssweetser@massmutual.com.

A woman business owner has unique needs and perspectives that tend to make succession planning a longer process involving both personal and business issues